From the Medici to Bitcoin

TechCrunch has a nice article about bitcoin that starts this way

In the 14th century, the Medici family used the power of its newly invented, double-entry accounting system to build a cross-border banking empire that banks still use today. Now more than 600 years later, cross-border payments total more than $22 trillion.

Nice intro. This comes next

These transactions are essential to conducting international business, and increasingly important as global commerce continues to expand — a 14th century process is simply not good enough. Medici’s system uses “nostro” and “vostro” accounts — in English that translates to “ours” and “yours.”

The bitcoin ledger, a two-column spreadsheet with who owns what, is simply the 21st-century version: 12 million rows — one for each person who owns bitcoin. The second column shows how many they own and that column totals 14 million bitcoins today. It’s a very clear public record of who owns what — one that does not require paying a third party to keep those accounts.

The amazing change here is that the bicoin ledger requires no middleman. No medici or Medici wannabe to charge fees just to keep track of things. And this  is why bitcoin or some other blockchain based system like it will transform cross border transactions.

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